FTC Opens Investigation Of Herbalife

April 1, 2014

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Herbalife has received a Civil Investigative Demand (CID) from the Federal Trade Commission (FTC). In response, Herbalife issued the following statement: “Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC. We are confident that Herbalife is in compliance with all applicable laws and regulations. Herbalife is a financially strong and successful company, having created meaningful value for shareholders, significant opportunities for distributors and positively impacted the lives and health of its consumers for over 34 years.”

On March 10, Herbalife commented on a New York Times report—”After Big Bet, Hedge Fund Pulls the Levers of Power” by Michael S. Schmidt, Eric Lipton and Alexandra Stevenson—about Bill Ackman of Pershing Square: “For the past 15 months, Bill Ackman has executed an unfounded, relentless and fraudulent public attack on Herbalife’s business model, blasting Herbalife to any media outlet or hedge fund audience willing to listen.

As The New York Times reports, Ackman has, out of desperation, shifted his focus from Wall Street to Washington and key states across the country. Ackman’s unprecedented campaign to destroy Herbalife has now been exposed for what it is: a cynical, self-serving attempt to manipulate the market by buying his way into an investigation to cover his own reckless $1 billion dollar bet. There has never been merit to his accusations. Now we know how he has been orchestrating the appearance of outrage and concern. There should be no question any longer about Ackman’s motives, his techniques and his goals.”